How to change object color depending on its location? (EEVEE or BI, no Cycles)
Your source object doesn't have vertex colors at all, hence the problem (no data to transfer)

To add vertex colors to an object:


Add new vertex color layer
Go to Vertex Paint mode
Enable face selecting
Select face on a mesh
Choose a color
To fill a face with color: Paint -> Set Vertex Color


Steps above in one pic:



Now it is working in Vertex paint mode:



To see it in actual Blender Internal render, check Vertex Color Paint option in material settings:



And for Eevee/Cycles use Attribute node, just type vertex color layer name you have: